The bank’s board called an extraordinary shareholders
meeting for July 18 or July 19 to remove the rule that limits
all investors, except for its largest shareholder Fondazione
Monte dei Paschi di Siena, from accumulating voting rights of
more than 4 percent, according to a stock-exchange statement
yesterday. The bank proposed an age limit for board members.

Monte Paschi is reviewing the strategic plan approved last
year after it had to seek additional state aid to cover
undisclosed losses from derivatives carried out in previous
years. The lender, which received 4.1 billion euros ($5.47
billion) in February selling bonds to the government, has to
submit its plan to the European Commission by June 17.

The stock rose as much as 4.8 percent and was up 1.5
percent to 21.4 cents at 11 a.m. in Milan. The shares have
declined 5 percent this year, giving the bank a market value of
2.5 billion euros. The Bloomberg Europe Banks and Financial
Services Index rose 4 percent in the period.

New Investors

The voting cap removal may allow Chief Executive officer
Fabrizio Viola and Chairman Alessandro Profumo, appointed last
year to turn the company around, to attract more investors in a
planned 1 billion-euro capital increase for private investors.
The pair must return Monte Paschi to profit this year under its
rescue plan to avoid handing over a stake to the government.

“The change in the by-laws was expected and is a positive
move to facilitate the capital increase through the entry of a
core shareholder with proper representation in governance,”
Anna Maria Benassi, an analyst at Kepler Cheuvreux, wrote in a
note today. “The focus remains on the execution of the
restructuring plan and its possible review to comply with EU
Commission requests.”

The bank may double the capital increase to 2 billion
euros, Huffington Post reported on its Italian language website
yesterday, without saying where it got the information.